IT Managed Services Are Confusing, Study Finds

There’s a way for small- and medium-size businesses (SMB) to offload many of their IT headaches and save some money to boot. It's called managed services, but the message seems to be falling on deaf ears, according to a new study of value-added resellers (VAR), the people peddling these services. They say it’s a hard sell because of a lack of customer understanding.

VARs are companies that add features or services to existing products. These services can include product integration, customization, consulting, training and implementation.

VARs are increasingly focused on selling managed services to help SMBs monitor, manage and maintain their IT networks, software and equipment. The benefits of offloading or outsourcing IT services include lower costs, increased available resources and reduced IT headcount.

But, according to a new study released by CIT Group, a provider of vendor financing solutions, those benefits are not fully understood by many SMBs. This lack of understanding serves as the biggest barrier for VARs as they look to sell managed services to them.

The study, prepared in association with Forbes Insights, gathered the views of more than 100 executives at technology value-added resellers and technology channel partners that sell to SMBs.

More than 60 percent of respondents agreed that most of their customers don't really understand the benefits of managed services and that this was the major barrier to selling managed services to SMBs.

Another major barrier is conflicting mindsets. Many smaller companies see technology as a necessary expense as opposed to a strategic investment and are more concerned about the overall cost of managed services than the cost-savings benefits being touted by the VARs.

To bridge this gap, the report suggested, VARs may need to better define the SMB customer stakeholders. More than half the respondents said the primary decision-maker is the business owner or corporate decision-maker, not the head of IT. VARS may need to ask themselves whether they are directing their pitch to this audience, or if they are focusing on technology more appropriate to an IT director.

"The findings of this study are consistent with our experience in financing managed service contracts," said Ron Arrington, CIT's global president of vendor finance. "We have found that the most successful managed services programs are those in which the VAR clearly articulates the offering and quantifies the impact for the SMB. Likewise, when an SMB is committed to implementing a managed services solution, it soon realizes that it can play an important role in the growth plans and expense management of the company."

This story was provide by BusinessNewsDaily, sister site to IT TechNewsDaily. Reach BusinessNewsDaily senior writer Ned Smith at [email protected]. Follow him on Twitter @nedbsmith.